The Federal Reserve Bank of Minneapolis on Tuesday named Neel Kashkari, 42, its replacement for outgoing President Naryani Kocherlakota. Kashkari, whose experience spans the public and private sectors, will take over Jan. 1. Submitted photo: Minneapolis Fed

Minneapolis Fed picks former Treasury official as new head

The Federal Reserve Bank of Minneapolis on Tuesday named Neel Kashkari, a former U.S. Treasury official with private sector experience, its new president.

Kashkari previously served as a senior adviser and assistant secretary of the U.S. Treasury and later as managing director at Pacific Investment Management Company, better known as PIMCO. The 42-year-old will replace Naryana Kocherlakota, who said last year he would not seek another term.

The leadership change comes after a lengthy search. The bank announced its recruitment efforts in June and in the months since then narrowed its pool of candidates. Late last month, the bank’s board of governors unanimously approved the appointment.

Kashkari will step into his new role Jan. 1.

Dual experience in the public and private sectors positions him well to shape economic policy as the leader of a 1,100-person team that conducts economic research, supervises financial institutions and provides payments to commercial banks and the U.S. government, incoming Minneapolis Fed board chair MayKao Hang said in a statement.

“Mr. Kashkari is an influential leader whose combined experience in the public and private sectors makes him the ideal candidate to head the Minneapolis Fed,” said Hang, who co-chaired the search committee. “Mr. Kashkari stood out because of his inspiring leadership skills, solutions-oriented nature, collaborative style and deep commitment to public service.”

The search committee considered candidates from within and outside the Fed system.

Aside from his work at the Treasury and PIMCO, Kashkari in 2013 unsuccessfully ran as a Republican to be California’s governor. He previously was a vice president at Goldman Sachs in San Francisco. Before that, he was an aerospace engineer at TRW, an Ohio firm acquired by Northrop Grumman.

Kashkari holds an MBA from the Wharton School of the University of Pennsylvania. He earned undergraduate and master’s degrees in mechanical engineering from the University of Illinois at Urbana-Champaign.

In part by harnessing his varied experience, Kashkari said he plans to cement the Fed’s reputation in the banking and monetary policy space.

“The Minneapolis Fed has built a strong reputation for economic research and thought leadership as well as excellence in bank operations,” he said in a statement. “I am delighted that I will be working with the Federal Reserve Bank of Minneapolis team to build on the bank’s many achievements.”

Kocherlakota, who took over as Fed president in 2009, went public with his exit plan in June. After his Fed tenure expires on Dec. 31, the outgoing president will begin a stint as the first-ever Lionel W. McKenzie Professor of Economics at the University of Rochester in New York.